In an era of cost containment and accumulating clinical evidence that outpatient treatment for substance abuse may be as effective as inpatient treatment, the effectiveness and cost of various levels of intensity of outpatient treatment has not been assessed. Especially given the range and severity of problems commonly found among substance abuse clients, a question remains of what is the optimum intensity of services for rehabilitation and whether this differs by gender, by ethnicity, by primary type of substance used, and by mental health status. To this end, the present study proposes a controlled, random assignment comparison of day hospital outpatient treatment and traditional outpatient treatment in a heterogeneous population of a large health maintenance organization's (HMO) substance abuse program. The study has the following goals: 1) to compare the effects of day hospital treatment and traditional outpatient treatment on early drop out rates, length of stay, and substance use during treatment. 2) to compare the effectiveness of day hospital and traditional outpatient treatment as measured by level of substance use and abstention, level of psychosocial functioning, and utilization of other medical services (including inpatient care, varieties of outpatient treatment, emergency/crisis visits, medications, and laboratory testing). 3) to compare the costs of day hospital and traditional outpatient treatment and assess their cost effectiveness. 4) to determine the patient characteristics associated with successful treatment outcome in both programs; in particular, gender, ethnicity, primary drug preference, and psychiatric severity. 5) to determine the characteristics of treatment associated with successful treatment outcome in both programs; in particular, service intensity and service mix.